EXHIBIT 12

 

CUMMINS INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
 

 

 

Three months ended

 

Six months ended

 

 

 

July 2,

 

June 26,

 

July 2,

 

June 26,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

Millions

Earnings

Earnings before income taxes and minority interests

$

299

$

207

$

527

$

342

Add:

   Fixed charges

35

36

71

72

   Amortization of capitalized interest

2

1

3

2

   Distributed income of equity investees

17

50

34

57

Less:

   Equity in earnings of investees

(34

)

(32

)

(60

)

(60

)

   Capitalized interest

(1

)

(1

)

(2

)

(1

)

Earnings before fixed charges

$

318

$

261

$

573

$

412

                   

Fixed charges

Interest expense

$

26

$

28

$

53

$

56

Capitalized interest

1

1

2

1

Interest portion of rental expense(1)

8

7

16

15

Total fixed charges

$

35

$

36

$

71

$

72

                   

Ratio of earnings to fixed charges

9.1

7.3

8.1

5.7

 

(1) Amounts represent those portions of rent expense that are reasonable approximations of interest costs.